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No none of this has anything to do with Penny Stock Guide, its just a test page
And the meek shall inherit the earth................Weve taken car of everything the
words you read the songs you sing, the pictures that give pleasure to your eye. Its one
for all, all for one, we work together common sons never need to wonder how or why.....
Questions and Answers:
Question 101: As a Distributor, do I need to be able to send
all of the EDI #852 fields to participate in VMI? After a few months of effort, we have
only been able to validate 5 of the fields.- Kevin R., Chicago, Ill
Answer: Well, it depends. You should work with your Manufacturing partner to
determine which fields they require. Not all software uses every field. (See the EDI link for the main #852
fields)
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Question 102: Who "owns" the inventory in the
Distributors stock- the Manufacturer or the Distributor? -Bob N, San Jose CA
Answer: In most cases, the distributor still owns the inventory. Even though the
manufacturer triggers the replenishment order, the ownership remains with the
distributor. Many manufacturers will work out some type of return policy if you
become overstocked because of any VMI error.
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Question 103: I don't think I agree with the concept of
allowing a manufacturer to generate my orders. How do I know he won't overload me with
inventory? - Peter C, London England
Answer: One of the first steps in implementing VMI, is the distributors
understanding of how the new stock plan is generated. The manufacturer must fully
explain how it is arriving at the new stock level. The distributor must be
comfortable with the plan. Most respectable manufacturers would never
"overload" you because that would erode the trust between you and jeopardize the
program.
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Question 104: Culturally, the idea of trusting each
other (Manufacturer and Distributor), has this been a show stopper more often then not? -
George M., Groveland MA
Answer: No. Its actually a selling point. Both the manufacturer and the distributor
love the idea of "the power of partnership". They work together to achieve the
same goal - an improved inventory plan for the distributor. If something does go wrong ,
most manufacturers give the distributor the option of a fairly liberal return policy. If
the distributor becomes overstocked (for whatever reason) the manufacturer agrees to take
the product back. One of the keys to building a trusting relationship is for the
distributor to truly understand how the new stocking plan is calculated. If he does, he
should never have to question why something was ordered.
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Question 105: We are considering starting up a VMI
program with some of our distributors.. Should we do a pilot program first?
Answer: Yes. When choosing a pilot program, I would recommend picking a
customer who has alot of experience with EDI. Pilot with 2 - 3 customers who are willing
to go through the learning experience with you. They must be interested in forming a true
partnership. Expect a few months of confusion. But through trial and error, hopefully
things will work out for the best.
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Question106: What would be a good key performance
indicator(s) for monitoring the VMI process?
Answer: Four of the main KPI's for monitoring the success of a VMI program are:
Inventory Value, Inventory Turns
Fill Rate to the Distributor (Service Level) & Fill Rate to the Distributor's end
customer.All 4 measurements should be broken down by ABC Classification if possible.
Before the VMI program begins, the distributor should have these measures in place. He
should then work with the manufacturer on establishing the proper target for each measure.
Once the program begins, there should be a quarterly review of these KPI's comparing the
current levels to the pre-VMI levels and to the target level. It is only through this type
of before & after comparison that you can get a clear picture of the success or
failure of your program.
Other measurements would include: the number of Purchase Orders per month, total
transportation costs, the number of items returned to the manufacturer & the costs
involved (both on the manufacturer & distributors side).
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Question 107:When looking at VMI solutions, should we
consider an Application Service Provider?
Answer: Definitely, an ASP can offer
significant advantages over the traditional model of purchasing hardware & software
and managing the implementation yourself. Among the potential benefits are: 1) Faster
implementation, 2) Predictable costs as new trading partners are added, 3) Lower I/S staff
needs, and 4) Guaranteed reliability and availability. In short, use of an ASP for VMI
deserves a serious look.
For more information about ASP's , you can contact Fred Kleiser of EDM at: info@edm1.com
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